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Market at 3-month low. Top 10 trading ideas for the December series

Experts feel the mood at street turned more cautious and nervous after Friday's sharp fall and hence the more correction can't be ruled out if the Nifty decisively breaks 17,000 mark in coming days.

November 29, 2021 / 10:38 AM IST
 
 
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The market started off December series on a dismal note with the benchmark indices as well as broader markets falling around 3 percent each on November 26, as bears took a complete control over Dalal Street. As a result the weekly fall widened to over 4 percent. Fears of a new COVID-19 variant detected in South Africa which led to a shutdown of borders by nearby countries, heavy selling by FIIs and resurgence of COVID cases in European nations were the key reasons behind the sharp correction.

The Nifty50 broke crucial 17,000 mark intraday on Friday, though later managed to defend the same level at close. The index closed at 17,026, the lowest closing level since August 30, 2021 and saw the biggest single-day fall since April 12, 2021. Experts feel the mood at street turned more cautious and nervous after deep cut in the index and broader markets and hence the more correction can't be ruled out if the index decisively breaks 17,000 mark in coming days.

"Considering the weekly chart, we will not be surprised to see it extending towards 16,500 - 16,200 in coming days. We do not want to sound too pessimistic, but this is what the price structure looks like at this moment," says Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One. "On the flip side, 17,200 - 17,400 are to be seen as immediate hurdles."

Chavan says with a slightly broader view, if Nifty has to regain any strength, it needs to surpass 17,700 with some authority. "Honestly this looks highly unlikely at current juncture as we expect lower levels to get tested first."

The broader market too seems to have succumbed to this selling pressure and hence, "one should not be in a hurry to do any kind of bottom fishing immediately," he advised.

Close

Here are top 10 trading ideas by experts for the next 3-4 weeks. Returns are based on November 26 closing prices:

Expert: Nandish Shah, Senior Derivative & Technical Analyst, HDFC securities

Shipping Corporation of India: Buy | LTP: Rs 147.25 | Stop Loss: Rs 138 | Target: Rs 165 | Return: 12 percent

Stock price has broken out on the weekly chart to close at eleven-year high on the weekly chart. Stock price is forming bullish higher top higher bottom formation on the weekly chart.

Primary trend of the stock is positive where it is trading above its all important short term and long term moving averages. Daily RSI (relative strength index) and MFI (money flow index) line has witnessed trend line breakout, which is bullish development for the short term.

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LIC Housing Finance: Sell | LTP: Rs 379.15 | Stop Loss: Rs 400 | Target: Rs 350 | Return: (-8) percent

Stock price bas broken down from the upward sloping trendline, adjoining the lows of August 23 and November 23 with higher volumes.

RSI and MFI Oscillators are placed below 40 and in falling mode, indicating strength in the downtrend of the stock. Minus, DI (Directional Indicator) is trading above Plus DI while ADX (Average Directional Index) line is placed above 25, Indicating momentum in the current downtrend.

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Expert: Vidnyan Sawant, AVP - Technical Research at GEPL Capital

Cipla: Buy | LTP: Rs 966.70 | Stop Loss: Rs 915 | Target: Rs 1,005-1,093 | Return: 4-13 percent

Cipla has given a strong consolidation breakout with a volume confirmation which has been forming since last 6 weeks which shows strong bullish undertone of the stock for medium to long term. The stock has formed CIP formation (Change in Polarity) and Triple Bottom pattern at Rs 870 levels and moved up indicating the stock has limited downside risk.

The momentum indicator RSI has sustained above 55 levels on all the time frames which confirms strong positive momentum of the stock for the medium to long term.

Looking at the prices action and the momentum indicators and other technical parameters we believe this stock has a lot of upside potential left.

Going ahead, we expect the prices will move towards Rs 1,005 levels (Life Time High) followed by Rs 1,093 mark (78.6 percent extension level of Rs 738 – Rs 1,005 projected from Rs 883). The stop loss for this trade set up would be Rs 915 levels of closing basis.

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Escorts: Buy | LTP: Rs 1,869.40 | Stop Loss: Rs 1,755 | Target: Rs 2,008-2,164 | Return: 7.4-15.8 percent

Escorts has given a Bullish Flag pattern breakout on the daily charts and made a fresh Life Time High at Rs 1,889 levels and it has sustained near record high levels which shows strong positive undertone of the stock for the medium to long term. The breakout is backed by the strong volume confirmation indicating the strength of the upward move.

The momentum indicators and the technical indicators all point towards the possibility of the prices moving higher towards the Rs 2,008 mark immediately (61.8 percent extension level of Rs 1,422 – Rs 1,831 projected from Rs 1,755). If this level is breached, we might see the prices move towards Rs 2,164 (100 percent extension level of Rs 1,422 – Rs 1,831 projected from Rs 1,755).

The stop loss for this trade set up would be Rs 1,755 levels of closing basis.

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Divis Laboratories: Buy | LTP: Rs 4,937.80 | Stop Loss: Rs 4,670 | Target: Rs 5,425-5,770 | Return: 9.9-16.9 percent

The stock has created the Triple Bottom pattern at Rs 4,670 levels and moved up which shows strong positive undertone of the stock. On the daily charts, the stock sustained above its 20-day SMA (Rs 4,932) indicating positive strength of trend.

The momentum indicator like RSI is sustaining above 50 mark indicating positive momentum of the stock. As per price pattern, we feel that the stock prices gain momentum and move higher toward the Rs 5,425 (Life-Time High) levels and eventually towards Rs 5,770 (50 percent extension level of Rs 3,153 – Rs 5,425 projected from Rs 4,635).

Investors can accumulate Divis Labs at this point and hold for a target of Rs 5,425 and Rs 5,770 with a stop loss of Rs 4,670 on closing basis.

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Expert: Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities

GlaxoSmithKline Pharmaceuticals: Buy | LTP: Rs 1,703.65 | Stop Loss: Rs 1,590 | Target: Rs 1,930 | Return: 13.3 percent

It is the most outperforming stock of the pharmaceutical basket. On Thursday, the stock did a price and volume break out formation. It is advisable to buy at supports. Buying is advisable at Rs 1,710 and at Rs 1,660. Keep a stop loss at Rs 1,590 for the same. On the higher side, Rs 1,800 and Rs 1,930 would be hurdles.

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Voltas: Sell | LTP: Rs 1,164.30 | Stop Loss: Rs 1,210 | Target: Rs 1,070 | Return: (-8.1) percent

It has formed lower top at Rs 1,282 and is also forming the Head and Shoulders pattern at the top of the rally. Based on it, the stock may fall to Rs 1,070 in the near term.

Selling is advisable at current and up to Rs 1,180. Keep a stop loss at Rs 1,210 for the same.

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Mphasis: Sell | LTP: Rs 3,059.20 | Stop Loss: Rs 3,110 | Target: Rs 2,880 | Return: (-5.9) percent

The stock was forming complex corrective pattern between Rs 3,500 and Rs 3,200, however, on Friday, the stock broke the support zone of the trading range and closed at Rs 3,060.

Technically, it is heading for the target of Rs 2,950-2,880. Sell at Rs 3,060 and protect the short positions with a stop loss at Rs 3,110.

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Expert: Vinay Dhanotiya, Lead of Technical Research at CapitalVia Global Research

Hindustan Unilever: Buy | LTP: Rs 2,335.10 | Stop Loss: Rs 2,294 | Target: Rs 2,424 | Return: 3.8 percent

Being defensive sector, we might see some relief rally as stock is sustaining above Rs 2,300 which is rock solid support in higher time frames.

The stock might rally 2-3 percent from this level as risk and reward is favourable for traders.

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Astral: Buy | LTP: Rs 2,141.4 | Stop Loss: Rs 2,128 | Target: Rs 2,275 | Return: 6.2 percent

Astral is taking support on its rising trend line and sustaining above its weekly support level Rs 2,050-2,100.

ADX is firmly stood around 25, indicating more traction ahead which might fuel stock's sentiments.

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Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sunil Shankar Matkar
first published: Nov 29, 2021 07:03 am
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